IRS Section 179 Deduction
What is it?
" Section 179 of the U.S. internal revenue code is an immediate expense deduction that business owners can take for purchases of depreciable business equipment instead of capitalizing and depreciating the asset over a period of time. The Section 179 deduction can be taken if the piece of equipment is purchased or financed and the full amount of the purchase price is eligible for the deduction. "
Purchase eligible equipment
Take 100% of the deduction this tax year
Increase cash-flow for next year
How does it work?
" Taking the cost of the equipment as an immediate expense deduction allows the business to get an immediate break on their tax burden whereas capitalizing then depreciating the asset allows for smaller deductions to be taken over a longer period of time.
The Section 179 expensing method is offered as an incentive for small business owners to grow their businesses with the purchase of new equipment...The property must be placed in service during the tax year for which the deduction is being claimed. "